Working Papers

R. Rinaldi: Cash

The world of retail payments is changing rapidly. We observe app-based mobile payments, contactless and proximity transactions, digital wallet solutions, and payment initiation services. In the euro area instant payments, which can also be used for person-to-person payments via smartphone applications, are on the increase. The innovation in retail payments is spreading thanks to digitalization, to the activity of low-cost providers (such as financial technology companies) and of large internet platform companies (Google, Facebook, Amazon). Authorities endeavour to enhance these services and, in some cases, provide them directly in competition with the market when the latter does not work properly.

In this new world the question arises as to what place cash will occupy in domestic and cross-border payments. Should we be anticipating its swift demise, leading it - in the not too distant future - to take its place among museum exhibits rather than in the pockets of our citizens? What is the role of the authorities in charge of regulation and supervision?

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